• 37% of trustees reviewing their employer covenant.
• 12% of trustees decreasing their currency hedging
• 23% increasing their interest rate hedging.

Almost two-thirds (64%) of trustees have taken measures to prepare for the impact of Brexit despite the ongoing uncertainty, according to research conducted by Hymans Robertson, the leading pensions and risk consultancy. Over a third of respondents to the survey (37%) had reviewed their employer covenant in light of Brexit, and 29% had considered their contingency plans.

Amongst the actions taken, many had also taken protective measures in anticipation of market instability.  Almost a quarter (23%) of trustees had increased their interest rate hedging in anticipation of a fall in yields and 12% had decreased their exposure to currencies in anticipation of sterling falling. However, despite many taking precautions, over a third (36%) of trustees said that they had done not done anything to prepare for Brexit.

Susan McIlvogue, Partner and Head of DB Trustee Consulting at Hymans Robertson commented on the survey results:

“It is encouraging that almost two-thirds of trustees are taking proactive steps to manage Brexit related risks.  It is good to see that many schemes have implemented extra protection against market instability, with almost a quarter increasing their interest rate hedging.  With yields falling over 20bps in March this decision is already paying off for those schemes.

“It is also reassuring to see that a significant number of trustees are reviewing contingency plans and the covenant of their sponsoring employer. These are key areas to keep under review until the impact of Brexit becomes clearer.”